Buying an owner-financed home is a great option for those who want to become homeowners but don’t have access to traditional mortgage financing. An owner-financed home allows the buyer to purchase a property directly from the owner, with the owner providing all or part of the financing.


Every year, American consumers spend over $26 billion on owner-financed homes. If you’re unfamiliar with these types of homes, you’ve come to the right place.


Below we will discuss why investing in owner-financed homes in San Antonio is a fantastic idea.


1. Lower Down Payment Requirements

Owner-financed homes are an increasingly popular way for buyers to get into owner-occupied homeownership without dealing with the aggravation of traditional mortgage financing. Compared to traditional lenders, owner-financed homes require lower down payment requirements, making it easier for more people to become homeowners.


In owner-financing, the home’s seller acts as the lender, offering a loan directly to the buyer. This allows the buyer to spread out their payments over time and avoid coming up with a large down payment. The owner of the home also sets the interest rate and repayment schedule, offering buyers greater flexibility in their financing options.


2. No Credit Check is Required

One of the major benefits of owner-financed homes in San Antonio is that buyers do not need to worry about a credit check. This removes the typical requirement buyers must meet when applying for a traditional mortgage, allowing them to purchase a home more quickly and easily. A lack of a credit check also makes owner-financed homes accessible to those with less-than-perfect credit.


3. Avoid Private Mortgage Insurance (PMI) Fees

Purchasing a home through owner-financing helps you avoid Private Mortgage Insurance (PMI) fees, which can be expensive and add up quickly. PMI is typically required for any loan with less than a 20 percent down payment and can add up to 2 percent of the total loan amount annually. By using owner-financing, you can avoid this extra cost and save thousands of dollars over the life of your loan.


4. A Quicker Closing Process

One of the biggest advantages of owner financing is the quicker closing times, which can be completed in as little as a few days. This means buyers don’t have to wait for the loan process to be completed by the bank or other lender and can move into their new home much faster. The lack of traditional loan fees and paperwork can make owner financing a great option for home buyers who want to move quickly.


5. Easier Approvals for Self-Employed Buyers

Owner-financed homes in San Antonio can be a great way for self-employed buyers to get into homeownership. These types of transactions offer easier approvals than traditional mortgages, as the owner is not relying on credit scores or other criteria used by mortgage lenders. Self-employed buyers often have difficulty obtaining mortgage financing due to their unique income situations, but owner financing provides an easier path to approval.


If you’re interested in buying an owner-financed home, check out the selection of properties offered by Dillingham & Toone Real Estate.